Selling Hospital Products in Korea: How the Health System, Hospitals and Fee Schedule Shape Your Price

Our earlier guide covered how a medical device gets approved and reimbursed in Korea. This article looks at what comes next: the system a product is sold into. For foreign companies supplying hospitals, and especially operating-room consumables, three questions decide whether a product sells: who pays for the care, how hospitals are paid for it, and how hospitals buy. Korea answers each of them differently from the United States.

1. One payer for almost everyone

Korea has a single, compulsory national health insurer. At the end of 2024, 97.1% of the population, about 51.4 million people, was covered by National Health Insurance, and the rest by the public Medical Aid program. The National Health Insurance Service (NHIS) collects contributions and pays providers. The Health Insurance Review and Assessment Service (HIRA) reviews claims and manages the lists of covered procedures and materials. The Ministry of Health and Welfare (MOHW) sets policy, with fee decisions made in its Health Insurance Policy Deliberation Committee.

The scale is large. NHIS paid KRW 101.7 trillion in insurance benefits in 2025, up 8.4%. Revenue still exceeded spending in 2025, but the surplus shrank to KRW 0.5 trillion, and the NHIS chairman has warned that 2026 may turn to a deficit. The 2027 contribution rate has been frozen at 7.19% of wages. For suppliers, this means steady cost-containment pressure on the prices that hospitals are paid.

Patients share the cost. For outpatient care they pay 30% at a clinic, 40% at a hospital, 50% at a general hospital and 60% at a tertiary hospital; for inpatient care the usual share is 20%.

2. The hospital landscape

Korea has many hospital beds and relatively few doctors. According to OECD Health Statistics 2026, which mostly reports 2024 data, Korea has 12.5 hospital beds per 1,000 people, about three times the OECD average of 4.2, but 2.6 practising doctors per 1,000, including doctors of Korean medicine, against an OECD average of 4.0. Koreans also see a doctor more often than people in any other OECD country, 17.9 outpatient visits a year.

NHIS counts 47 tertiary hospitals, 337 general hospitals and 1,429 hospitals (June 2026), plus about 37,700 clinics. For surgical products, the main customers are these roughly 1,800 acute hospitals and the specialist day-surgery clinics that perform procedures such as cataract and hemorrhoid surgery.

Two structural points matter for a supplier:

Almost all hospitals are private, but they are not investor-owned. The Medical Service Act allows hospitals to be opened by doctors, the state, medical corporations and non-profit bodies such as university foundations, but not by for-profit companies; the only exceptions are narrow provisions for foreign medical institutions in free economic zones and Jeju. Public hospitals account for only about 5% of hospital-level institutions and under 10% of beds, according to figures released at the 2026 National Assembly audit, far below the OECD average.

Demand concentrates at the top. Tertiary hospitals are designated by MOHW for three years. The current cycle has 47; for 2027–2029, 63 hospitals applied, and the results are expected in December 2026. The "Big 5" in Seoul (Seoul National University Hospital, Asan Medical Center, Samsung Medical Center, Severance Hospital and Seoul St. Mary's Hospital) draw patients from across the country: from January to April 2026, 60.8% of their inpatients lived outside Seoul, according to an analysis of MOHW data reported by Medigate News.

The five differ in who runs them and in how they work with companies. Seoul National University Hospital is a public corporation; Asan Medical Center and Samsung Medical Center are run by the Asan Foundation and the Samsung Life Public Welfare Foundation; Severance belongs to Yonsei University and Seoul St. Mary's to the Catholic Medical Center. Each has its own channel for industry: a technology commercialization support center at Seoul National University Hospital, a technology commercialization office under Samsung's research institute, Yonsei's bio-health technology holding company, the Catholic University's industry-academic cooperation foundation, and space for tenant companies at the Asan Institute for Life Sciences. One example is LN Robotics, founded in 2019 by an Asan biomedical engineer and an Asan cardiologist and listed among the institute's tenant companies; its robot for coronary interventions has been used with patients at Asan since April 2026, according to Hankyung Magazine. We did not find an English-language entry point for foreign companies at any of the five, so an introduction through a Korean partner or a clinical champion is usually the practical route.

All five are certified as research-driven hospitals, a government designation; the first ten such hospitals, which include four of the Big 5, have shared about KRW 40–50 billion a year in government R&D funding since 2014. Their doors for industry differ in what they offer, from incubators and tenant space to technology holding companies:

Policy is now pushing the other way. Since late 2024 all 47 tertiary hospitals have joined a government restructuring program that cuts general beds, rewards severe and complex cases, and sends stable patients back to local hospitals. Over time, routine procedures and the consumables used in them are likely to shift toward general hospitals. A supplier should plan for both tiers.

Surgical demand has largely recovered from the 2024–25 walkout of trainee doctors. NHIS statistics show about 2.15 million major operations in 2025, up 4.8%, with cataract surgery the most common at about 692,000 operations. Recovery has been uneven: national university hospitals were still about a quarter below their 2023 surgery volumes in 2025, according to data released by a member of the National Assembly.

3. How hospitals are paid

Most insured care in Korea is paid fee-for-service against a national schedule. Each procedure has a relative value in points, and the fee is the points multiplied by a conversion factor in won per point, negotiated every year. For hospitals, the conversion factor rises from KRW 83.8 in 2026 to KRW 84.7 in 2027. In October 2026 the policy committee also approved higher fees for severe surgery and anesthesia from 2027, funded by cuts to laboratory tests and CT/MRI fees, according to press reports.

Seven common operations are paid by case instead (diagnosis-related groups, DRG): cataract surgery, tonsillectomy, appendectomy, hernia repair, anal surgery, benign uterine surgery and Caesarean section. In these cases one fixed price covers the procedure, drugs and materials. HIRA's 2026 manual shows that drugs and materials make up 10% to 40% of the price, depending on the operation.

The most important point for a supplier is how its product is treated in the schedule. HIRA's rule is that treatment materials are, in principle, included in the procedure fee. Only items that MOHW lists can be billed separately. The same product can therefore be a revenue line, a pass-through cost or a cost to cut:

Listed for separate billing. The hospital bills the insurer what it actually paid, up to a published ceiling price. Discounts below the ceiling go back to the payer, not the hospital. Surgical stapler cartridges and trocars are examples. In 2026 MOHW raised ceilings for about 27,000 separately billed items by an average of 2% and moved price adjustments to January and July.

Selective coverage. The item is covered, but the patient pays 50%, 80% or 90%. Skin staplers, disposable ultrasonic and radiofrequency energy devices and anti-adhesion products are examples in HIRA's lists.

Flat fee. The hospital receives a fixed amount whatever brand it uses. Disposable drapes and gowns, for example, are paid as one surgical pack per operation, from KRW 35,970 to KRW 70,620 depending on anesthesia time in HIRA's 2022 list (about US$25–50). A cheaper pack leaves the hospital more of the fee.

Included in the procedure fee. The cost is already inside the procedure price, so the product brings no separate revenue and the hospital tries to minimize what it spends. Many general OR supplies fall here, and so does every material used in the seven DRG operations, apart from a short list of exceptions such as some energy devices and hernia meshes. A product in this category does not get its own reimbursement price, although a new product may still need HIRA to confirm how it is classified.

4. How hospitals buy

Most large private hospitals buy through a single purchasing agent, known in Korea as a gannapsa. Unlike a US group purchasing organization, which negotiates contracts, a gannapsa is an intermediary wholesaler: it buys the products and supplies the hospital. Data from the National Institute of Medical Device Safety Information, released to a member of the National Assembly and reported in October 2026, show that 27 of Korea's 35 private tertiary hospitals received more than 90% of their medical devices from one wholesaler as of July 2026. At Seoul St. Mary's Hospital, Severance Hospital and Asan Medical Center, the share was 98% to 99%. Many of these agents were set up by, or are linked to, the hospital's own foundation or university.

The agent does not replace the distributor. A foreign manufacturer still needs a Korean importer to hold its product licenses, and a distributor to work with clinicians, support product evaluations and provide service. The order then usually passes through the hospital's agent. In practice, a supplier reaches these hospitals by convincing clinicians and by being registered with the right agent. Critics cited in the Korean press say agents keep 10% to 20% of sales, and sometimes more, so suppliers should allow for that margin in their pricing. In a 2022 government survey of 44 agents, the average operating margin was 5.6%, the health minister told the National Assembly in 2025.

The agents are consolidating. Ahead of the rule change described below, hospital owners have been selling their stakes, and a few companies now handle much of the Big 5's purchasing. According to Korean press reports in 2026, EasyMedicom (이지메디컴) is the main agent for Seoul National University Hospital and has bought a controlling stake in Severance's agent, Avison Care (에비슨케어). Samsung Medical Center's main agent is CareCamp (케어캠프), an affiliate of the drug wholesaler Geo-Young (지오영). The Catholic Medical Center's agents, which supply Seoul St. Mary's, were sold to Serveone (서브원). The Asan Foundation has put its stake in Medigood Partners (메디굿파트너스), which has mainly supplied Asan Medical Center, up for sale. For a supplier, an agent's vendor list can open several hospitals at once.

Public hospitals work differently. None of the 12 public tertiary hospitals bought more than 90% from a single wholesaler; most use more than ten. National university hospitals and regional public medical centers buy through public tenders, often annual unit-price contracts on the government e-procurement system.

The rules are changing. An amendment to the Medical Device Act, passed in December 2025 and due to take effect on December 31, 2027, according to press reports, restricts supply through agents in which the hospital's related parties hold a majority stake, requires written contracts and sets a six-month payment deadline. Payment terms are already long: in 2024, during the doctors' walkout, Seoul National University Hospital told suppliers it would move from three-month to six-month payment. Suppliers and distributors should plan for receivables of several months.

5. Rules specific to the operating room

Procedure packs are regulated as products. Korea's device regulation defines a kit of two or more devices in one package as a medical device in its own right. Legal commentary indicates that the kit is classed by its highest-risk component and that existing licenses for the components cannot simply be reused. We found no evidence that manufacturer-built custom procedure packs are as widespread in Korea as in the United States; at least one large Seoul hospital assembles surgical case carts in-house from individually purchased items, while sourcing its disposable drapes from an outside logistics center. Suppliers used to selling through pack assemblers should confirm early whether that channel exists for their customers.

Single-use means single use. The Medical Service Act has prohibited the reuse of single-use injection supplies since 2016, and since 2020 the ban has also covered other single-use devices designated by MOHW, with penalties including license suspension. There is no Korean regulatory pathway for third-party reprocessing of single-use devices. HIRA and the Korean Hospital Association discussed the idea in 2025, but MFDS opposed it, MOHW urged caution, and we are not aware of any bill.

Medical waste is expensive. Most medical waste must go to dedicated incinerators, of which there were 13 nationwide as of late 2024, and treatment is costly: unit costs set by the Ministry of Environment in 2021 put medical waste at KRW 1,397 per kg, about 4.7 times the KRW 299 for general waste sent to incineration (about US$1 against US$0.21). Hospitals have started to act: Samsung Medical Center cut its medical waste by 23% between 2023 and 2024, in part by sorting general and recyclable waste out of medical-waste bins. Lighter products and packaging that can be separated before use reduce a hospital's costs, and that is a concrete selling point.

Sustainability is emerging, not yet required. Samsung Medical Center received the top five-leaf rating in Newsweek's first list of the World's Greenest Hospitals in 2026, and a government committee has proposed phased environmental disclosure, starting with tertiary hospitals. We found no evidence yet that Korean hospitals score suppliers on carbon or packaging in purchasing decisions. Sustainability can differentiate a product; it will not, on its own, justify a higher price.

6. Origin, tariffs and VAT

Trade preferences depend on where a product is made, not where the company is based. Under the Korea–US Free Trade Agreement (KORUS), US-originating medical instruments enter duty-free, but a product designed in the United States and manufactured elsewhere generally takes the origin of the manufacturing country. It may qualify for the rates of another agreement, such as the Korea–China FTA, if it meets that agreement's origin rules; otherwise the standard rate applies. For example, a customs ruling reported in 2026 confirms that a basic rate of 8% was applied to syringe-type medical instruments (HSK 9018.39). Rates differ by 10-digit tariff line, so suppliers should confirm the code and origin with a licensed customs broker or an advance ruling from the Korea Customs Service.

A 10% VAT applies to imports and domestic sales. Medical services are VAT-exempt in Korea, so hospitals generally cannot recover the VAT they pay on consumables, and it becomes part of their cost.

What this means for foreign suppliers: a practical checklist

Find your payment category first. Separately billed, selective coverage, flat fee or included in the procedure fee: the answer shapes your pricing, your pitch and whether you need a reimbursement application.

Price against the hospital's economics. For bundled and flat-fee items, show the total cost per case, including waste disposal and staff time, not only the unit price.

Map the buying channel for each target hospital. For large private hospitals that is usually a purchasing agent; for public hospitals, a tender.

Cover more than the Big 5. A Big 5 reference helps, but policy is moving routine surgery toward general hospitals.

Check the pack question early. If you sell through procedure-pack assemblers elsewhere, confirm whether your Korean customers buy that way, and how a pack would be licensed.

Confirm origin and tariff codes before quoting. Where your product is made decides which trade agreement, if any, applies.

Lead with evidence on waste and cost. Sustainability is a differentiator in Korea, not yet a requirement, so pair it with numbers a purchasing committee can use.

The bottom line

Korea offers a large, concentrated and well-funded hospital market, but the national fee schedule shapes the economics of almost every case. A supplier that understands how its product is listed, how its customers are paid and who actually places the order can set a price and a channel strategy that work, instead of discovering them after launch.

GlobalRika works in Seoul with foreign healthcare and technology companies entering Korea: helping them understand the path to market, find and meet distributors, hospitals and corporate partners, and prepare materials in Korean. If you are looking at the Korean market, we would be glad to talk. Contact us at info@globalrika.com.

About the data

Figures are the latest available as of October 2026. Institution counts are from NHIS (June 2026). Fee-schedule rules and categories are from HIRA's treatment-material guidebook (2022 list) and 2026 DRG manual, and listed prices are 2022 values that have since been adjusted. Several figures, including the 2027 fee changes, purchasing-agent data and the Medical Device Act amendment, are taken from Korean press reports of government data and should be checked against official releases. Currency conversions use the 2025 average rate of about KRW 1,422 per US dollar. This article is general information, not legal, regulatory, tax or customs advice. Confirm details with MOHW, HIRA, MFDS, the Korea Customs Service or qualified specialists.

Sources

• National Health Insurance Service: institution counts by type (June 2026); conversion factors by year (July 2026); 2025 financial results (January 2026, as reported by Financial News); 2025 major surgery statistics (August 2026, as reported by Dailypharm)

• Health Insurance Review and Assessment Service: treatment material benefit list guidebook (2022); DRG payment manual (2026)

• Ministry of Health and Welfare: notices on treatment material ceilings and exchange-rate adjustments (2026, as reported by Dailypharm and Money Today); OECD Health Statistics 2026 analysis (July 2026, as reported by Medigate News and Financial News)

• Medical Times, Dailypharm and MTN: contribution rates, patient co-payments, tertiary hospital designation and restructuring program (2024–2026); Medigate News: Big 5 inpatients from outside Seoul (October 5, 2026)

• Kyunghyang Shinmun and NewDaily: Health Insurance Policy Deliberation Committee decisions on 2027 fees (October 28, 2026)

• Dailypharm: single-supplier purchasing at tertiary hospitals, from National Institute of Medical Device Safety Information data (October 8, 2026); hospital payment terms (March 2024)

• Big 5 profiles: DailyMedi on research-driven hospitals (May 14, 2025); Catholic University College of Medicine, Omnibus Park tenant list; Korea Health Industry Development Institute hospital income statements, as reported by DailyMedi (January 2026); MOHW and press reports on the tertiary hospital restructuring program (October–December 2024); hospital and foundation websites (Seoul National University Hospital, Asan Institute for Life Sciences, Severance, Catholic Medical Center, Catholic University industry-academic cooperation foundation); Medical Times (April 2021); Venture Square (September 2024); Hankyung Magazine on LN Robotics (June 27, 2026)

• Medical Device Act amendment, Act No. 21263 (December 30, 2025), National Law Information Center; Dailypharm: health minister on the 2022 survey of purchasing agents (October 14, 2025)

• Hankyung: hospital purchasing agents up for sale and the Medical Device Act ownership rule (July 22, 2026); Money Today: university-owned purchasing agents (October 7, 2026)

• Kormedi and Dailypharm: Medical Device Act amendment (April 2026)

• DailyMedi: discussion of single-use device reprocessing (July 2025); public hospital share (October 2026)

• Korea Institute of Machinery and Materials, citing Ministry of Environment notice 2021-259 on waste treatment unit costs (March 13, 2024); Kukinews and Dailian: incinerators and Samsung Medical Center waste reduction (2024–2026)

• Kormedi: Newsweek World's Greenest Hospitals 2026; Newsis and Kyunghyang: health-sector decarbonization proposal (May 2026)

• MFDS regulation on medical device approval, notification and review (kit definition); HitNews legal column on kit licensing (February 2026)

• KORUS FTA tariff schedule (USTR); Korea–China FTA explanatory materials (2015); Tax and Finance Media, customs case on medical instruments (May 2026); Shin & Kim, VAT on medical services